Valaris Limited Common Shares (VAL)

FairStock Score: 80/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am wary of businesses where the main asset is a commodity rig and the customer is a volatile oil producer. Valaris is a cyclical offshore driller, as FairStock’s Lynch category says. The balance sheet is not reckless: debt-to-equity is 0.36, Piotroski F-score is 7/9, and Altman Z-score is 2.44, which is not a fortress but not distress. FairStock’s reported return on equity is high at 33.62%, yet return on capital employed is only 3.26%, a reminder that accounting earnings can flatter a capital-heavy fleet when cycles turn. Free cash flow is negative: -$24.1M over the trailing twelve months, a -0.4% FCF yield. That is not the sign of a wide moat. In fiscal Q2 2026, the quarter ended 2026-06-30, Valaris reported revenue of $539.2M, net income of $50.4M, and diluted EPS of $0.72; a year earlier, in fiscal Q2 2025, the quarter ended 2025-06-30, revenue was $615.2M, net income $115.1M, and EPS $1.61. So earnings are down sharply year over year despite strong fiscal year 2025, ended 2025-12-31, net income of $982.8M and diluted EPS of $13.86. At the 2026-10-13 close of $85.55, FairStock calculates a market cap of $5.9B, P/E of 6.45, P/B of 1.87, PEG of 0.11, and EV/EBITDA of 10.83. Its Graham Number is $117.80, giving a 27.38% margin of safety. The 52-week range of $47.37 to $114.12 shows how violently the market reprices this cycle. I would call it statistically cheap but not a safe bargain: a low multiple on possibly peak cyclical earnings plus negative FCF is not enough. I want asset protection, staying power, and a clear discount to conservative earning power. The price is interesting, but the business quality is ordinary.

In plain English: Valaris supplies offshore drilling rigs and crews to oil and gas companies around the world. It is profitable, but the latest reported quarter showed lower sales and profit than the same quarter a year earlier, and it used more cash than it brought in over the past year. Based on the company’s stated earnings and accounting value, the shares look inexpensive, though drilling is a boom-and-bust business.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer